Vanguard ends customer discounts for TurboTax products

The coming tax season just got a little bit more taxing for some Vanguard customers.

Source: Vanguard | Facebook

Investment behemoth Vanguard has ended a long-standing offer that gave its customers discounts if they purchased TurboTax's products through Vanguard's website, saying tax preparation services aren't "core" to its business mission.

Vanguard customers for more than a decade had been able to get discounts of $10 or $20 off the price of popular TurboTax products, which include federal and individual state income tax preparation software.

Despite the decision, customers will still be able to access TurboTax products through this coming tax season. They'll also be able to upload tax-related information about their Vanguard accounts to TurboTax, as well as have refunds directly deposited into their Vanguard accounts.

Vanguard, which is the largest mutual fund company in the world with $3 trillion in assets under management, last week notified customers about the decision to end the discounts for TurboTax, which is owned by Intuit.

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Vanguard spokeswoman Katie Hirt told CNBC that she did not know exactly how many customers had received discounts on TurboTax products this past tax season, "but I can tell you that only a small fraction of our clients actually took advantage of the discount or offering."

TurboTax also informed its Vanguard-based customers in its own email, saying, "Unfortunately, Vanguard decided to discontinue this TurboTax program."

But TurboTax also told those customers "we're pleased to offer you a discount of $10 off the TurboTax federal product of your choice." No discount was offered for state tax products.

TurboTax's email says that customers who have "questions or comments regarding Vanguard's decision," should "please contact Vanguard" at a phone number that was provided.

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Vanguard spokeswoman Hirt said the company decided to terminate the discounts "recently" after a review found that TurboTax is "not core" to the company's business.

"We continually look at ... our lineup of offerings, and we, during a recent review, decided to align our offerings more with our core investment products and services," Hirt said.

"We determined that this offer was not core to how we serve our clients, offering low-cost products to help our clients reach investment success," Hirt said. "We're not a tax filing company, right?"

Above: The Vanguard Web page linking to TurboTax.

Hirt declined to say whether TurboTax had borne the cost of offering the discounts, or if Vanguard did, or some combination thereof.

"That's based on the contract we had with TurboTax, and I'm not going to comment on that," she said.

Hirt likewise declined to say whether TurboTax made efforts to continue the program after learning of Vanguard's decision.

Hirt said that Vanguad has "encouraged our clients to look for discounts through other providers, either through TurboTax" or other sources.

A spokeswoman for Intuit said in response to a query from CNBC, "For tax year 2015, Vanguard has made the decision to discontinue its offer of discounted or free TurboTax to its customers. We have notified our customers of this change and we're offering them our own discount on TurboTax this year."

She said additional questions about the situation should be directed to Vanguard.

Shares of Intuit fell more than 3 percent Thursday against the backdrop of a market that was broadly lower.